Employee Salary, Know More Details 100% Accurate

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Employee Salary

Get To Know More Detail About Employee SalarySalary is often equated with the term wages, but the meaning of salary is actually different from wages when viewed from the context. Salary is a form of payment by periodic from an employer to its employees which is showed in an employment contract. In Indonesia, the salary size is usually done in a period per month.

If viewed from the point of view of business implementation, the costs incurred for salaries can be considered as the costs needed to make human resources to run the operations of the business in office, therefore salary costs are also often referred to as personnel costs. And in the accounting books, these salary costs are recorded in the payroll account. So look at explanation below about salary and wages.

Salary and Wage Difference

In contrast to salaries that are fixed every month and will continue to be received throughout the work period, the value of wages is generally agreed in advance. Many private companies apply a system of fixed-term employment agreements (PKWT), and it is these contract employees who are rewarded with wages, not employee salary.

This is the explanation salary and wages differences. Although different in context, the salary arrangement in the law is regulated in the wage-related legislation. To find out how the salary system is, here is the wage system in economics:

  1. Wage system according to time, the amount of wages or salaries is based on a person’s length of service. Units of time can be calculated per month, per week, by hour or per day,
  2. The wage system based on the unit of output, the amount of wages or salaries is states on the number of goods produced by a person. The units for calculating the work can be in the form of per piece of goods, per unit length, or per unit weight.
  3. The piece rate system, the amount of wages or salaries is determined based on an agreement between the employer and the worker.
  4. Participation wage system or commonly called bonus wage, bonus wage system is an additional payment outside of wages or salaries aimed at encouraging (incentivizing) workers to carry out their duties better and more responsibly, with the hope of higher profits.
  5. In the business partner system, partial payment of wages or salaries is given in the form of company shares, but the shares are not given to individuals but to workers’ organizations in the company.
  6. The system of changing scale wages or sliding scale, the provision of wages or salaries is based on the scale of sales results that are always changing. If there is an increase in sales, the amount of remuneration paid will increase and vice versa.

The Role of Employee Salary

Salary is very important for employee, the amount, and when the date will be important for employee. Employee Salaryalso has a role. According to Poerwono (1982) in his book the role of salary can be viewed from two parties, namely:

Aspects of the employer (employer) is the manager

Salary is the main element in calculating production costs and components in determining the cost of goods that can determine the survival of the company. If a company gives a salary that is too high, it will result in a high cost of goods and if the salary is too low, it will make company not easy to get employee.

Aspects of employment

Employee Salaryis income received by a person and used to meet his needs. Salary is not the only motivation for employees to excel, but salary is one of the important motivations that encourage employees to excel, so that the level of salary given will affect employee performance and loyalty.

Payroll Function on Employee Salary

Salary function not only helps personnel managers in determining a fair and decent salary, but there are other functions, namely:

  • To attract skilled workers into the organization
  • To encourage employees to show high performance and good attitude
  • To maintain employee performance over a long period

Payroll Purpose of Employee Salary

As the salary is very important for the employee, so it also has a many purpose for the employee when do the job. There are so many kind of employeesalarypurpose, here are they:

Cooperation bond

By giving a salary, a formal bond of cooperation is established between the employer and the employee. Employees must carry out their duties properly, while employers or employers are required to pay salaries in accordance with the agreed agreement.

Job satisfaction

With remuneration, employees will be able to fulfill their physical, social status, and egoistic needs so as to obtain job satisfaction from their position. With employeesalary, they will satisfy with the job.

Effective procurement

 If the salary program is provide in the huge planning or program, the procurement of qualified employees for the company will be easier.


If the remuneration provided is large enough, the manager will easily motivate his subordinates. Employeesalary, they will be more motivated in finishing the job.

Employee stability

With a compensation program based on fair and proper principles as well as externally competitive consistency, employee stability is guaranteed because turnover is relatively small.


With the provision of remuneration that is large enough, the discipline of employees is getting better. Employees will be aware of and comply with applicable regulations. With employeesalary, can make employee more discipline.

Labor union influence

With a good feedback of the program the influence of trade unions can be avoided and employees will concentrate on their work.

Government influence

If the employeesalary program complies with applicable laws (such as minimum wage limits) then government intervention can be avoided.

Other Salary Related Terms

 • Net Salary: is salary that received by employees after deducting deductions; salary paid (in cash) after deducting all deductions;

 • Monthly Salary: salary paid once a month; • Blind Salary: salary received by not having to work;

 • Gross Salary: recorded salary before deductions;

• Basic Salary: the basic component of a person’s income that is used as a benchmark for calculating other components, such as family allowances, housing allowances, and incentives; basic wages (which have not been added to other allowances);

• Salary: pay (give) a salary, hire people by paying a salary.

• Salary: days of payment of salaries; receive a paid salary

 • Salary: process, method, act of paying salary (wages and so on)

There are more detail about employee salary, hope this article is useful.

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